Using Automated Technology More Broadly in Procurement

This is Part 4 and the final installment of the series What CPO’s Can Learn From Facebook’s CIO, based on a Wall Street Journal interview with Facebook CIO Tim Campos. You can also read Part 1, Part 2 and Part 3.

Today, we continue our analysis of how lessons learned from the CIO can be applied to the CPO.

Intelligence and automation are wonderful bedfellows…to reduce risk, consumption, spend, silos and customer dissatisfiers.

Tim Campos told the WSJ: “We automated the process of notifying people that they have visitors.”

Spend Matters’ take: Process automation is a great first order benefit, but often pales in comparison to the process intelligence that can fuel second-order benefits. For example, P2P automation is great for process efficiencies, but it’s a critical enabler for spend visibility, supply chain finance and stakeholder satisfaction. In the Facebook example above, automating the reception of visitors is great to make the process more effective for everyone (i.e., reducing wait times, saving receptionists from their phone tag game version of “Where’s Waldo”). But, what if Facebook used its Facebook app to streamline this process for visitors, and also used it to provide partial credentialing for prospective suppliers (or verification of existing ones) and other sets of intelligence? Yes, the technology can get a little creepy and must be used with care. I know of a procurement group that monitored such visitor logs to build an intelligence database of approved suppliers (and non-approved) suppliers that could be used in various ways. More practically, consider an app that your contractors use on their smartphone to track their whereabouts (e.g., making sure they don’t end up in restricted areas) and to interact with systems such a vendor management system. This is standard fare for mobile applications in the HR space (e.g., Kronos’ Mobile app), but should become more prevalent in the contingent labor space. Hopefully your ecosystem of providers is innovating here. The possibilities are nearly endless.

Be an early adopter – and lead by example

Campos (to the WSJ): “We instrumented the parking lot to keep track of where we have free parking capacity, and we optimized the number of valets that we need. It is easy to come up with that stuff because we automated.”

SM take: Using technology to improve resource utilization is everywhere and should be actively considered and piloted with your suppliers to make best use of your assets and theirs (e.g., better truckload capacity utilization, better utilization of dedicated BPO personnel, and so on). This may include partnering with disruptive entrants to any supply market, such as in the case of B2C providers that want to take their B2C “sharing economy” models into B2B. For example, it might be partnering with Uber for Business, or AirBnB to provide business travelers with choices when a city is basically sold out of hotel rooms and charging exorbitant rates.

If procurement is going to have a seat at the table where business strategy formulation happens, it must be well versed in how technology/services markets can help shape the business strategy as part of a “digital business strategy” effort. It should also have a close working relationship with IT to jointly serve the business rather than having a dysfunctional internal “balance of trade” with each other (even though both functions share nearly identical problems).

As you can see, there are plenty of procurement-relevant lessons to be gleaned beyond the usual tribal knowledge sharing between procurement organizations. If you have questions on this, or have some insights you’d like to share with us in confidence, please don’t hesitate to reach out to us.

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